(Yicai Global) March 13 -- Zhejiang Huayou Cobalt Co. plans to build a CNY6.4-billion (USD1-billion) smart manufacturing base in its home province as it looks to produce 150,000 tons of a raw material for lithium batteries every year.

The non-ferrous metal processor will front 30 percent of its own money for the project, located in Tongxiang city, and the remainder will come from bank loans, it said in a statement. The firm hopes to begin construction in October and have the factory up and running within three years, boosting profits in the field to around CNY1.2 billion a year.

The new plant will produce lithium nickel cobalt manganese oxide, an important, low-cost material in lithium-ion batteries, which are commonly used in new-energy vehicles and smartphones. China has ramped up NEV development in recent years and plans to rule out petrol-fueled vehicles in the future. It sold some 605,500 plug-in passenger cars last year to take a 49-percent of the global NEV market, growing 30 times faster than the worldwide average, data from industry researcher EV Volumes shows.

The new plant is an important move in Huayou's ongoing transformation, and will help it conform to the country's macro-policy for new energy development, the firm said.

Demand for such lithium battery materials in the automotive sector is set to quintuple over the next five years, according to industry researcher IIT Japan. Demand in consumer electronics is forecast to maintain average annual growth of around 5 percent.